Consumer advocates blast broadband plan

A broadband Internet service initiative launched Thursday by the Federal Communications Commission set off protests from consumer advocates who fear it threatens the future of accessing the Web.

The FCC said it will overhaul the rules governing high-speed Internet access with the goal of encouraging private companies to invest billions to bring broadband connections to consumers. The federal regulators tentatively agreed to reclassify broadband as an "information service" instead of viewing it as a form of telecommunications.

While the new definition is fairly arcane, this action lays the groundwork for deregulating the broadband Internet in a way that will allow large telephone and cable TV companies to shape it to their economic advantage rather than let it develop to benefit the public, critics said. The FCC disputes that, saying that clearing away regulatory underbrush is necessary to lure private firms into spending money needed to build the Internet's next-generation infrastructure.

It will take many months before the FCC takes final action revamping broadband regulation and even longer before the impact of those actions is felt. But consumer advocates said the FCC appears ready to free giant phone and cable TV companies to control broadband services with only minimal government oversight.

"The FCC is handing the reins of control over our communication system to a handful of monopolistic companies," said Mark Wahl, broadband project director for the Center for Digital Democracy. "And the public interest stands to be trampled in the process."

Mark Cooper, research director for the Consumer Federation of America, called the FCC broadband revamp "a drip, drip, drip that may take away the Internet as we know it."

Cooper said the FCC will free giant phone companies such as SBC Communications Inc. and Verizon Communications Inc. from obligations to open broadband networks to all users as has historically been required of telecommunications networks.

"By tilting entirely in favor of network owners, the FCC will stifle the creativity of content and applications developers who don't own the distribution networks," he said.

Many telecom and information technology trade associations have urged the Bush administration to endorse broadband development as a means of stimulating the economy. But there is little industry consensus on what form government support should take.

A bill pending in Congress sponsored by Reps. Billy Tauzin (R-La.) and John Dingell (D-Mich.) that would dramatically reduce telephone regulation is strongly supported by Baby Bells like Verizon and SBC and opposed by long-distance giant AT&T Corp., consumer advocates and most state utility regulators.

SBC has made deregulation its top priority this year, and it tapped a former Clinton Cabinet member, William Daley, brother of Chicago's mayor, to be its president in hopes that Daley's clout will advance SBC's deregulation agenda.

The initiative at the FCC is seen by critics as a way for SBC and Verizon to get free of regulation even if the Tauzin-Dingell bill fails to become law.

SBC lauds FCC's move

Ed Whitacre, SBC's chief executive and chairman, praised the FCC's action, saying that "under the current patchwork system, the growth and availability of broadband services is threatened by regulatory disparity."

FCC Chairman Michael Powell said the initiative marks a turning point for the agency. "We have stopped just talking about promoting broadband and started acting," Powell said.

The FCC has been making policy in a piecemeal fashion until now, he said. "The commission for too long has cracked open the door, but frightened by the dark, slammed it shut again," Powell said.

Baby Bells have objected that the major competitor to their DSL broadband services is the cable modem, but that cable TV firms aren't required to open their networks in the way phone networks must be opened to all comers.

Thursday's action is the first step that "would balance cable--a huge unregulated monopoly broadband provider--with competition from companies like Verizon that have opened networks, accommodate any user and yet today compete at a huge regulatory disadvantage," said Eric Rabe, a Verizon spokesman.

State regulator has doubts

Terry Harvill, a member of the Illinois Commerce Commission, said state policy is to promote multiple broadband providers. If federal policy has the effect of limiting competition to just two contenders--the cable company and the phone company--"then the consumer won't be well-served," Harvill said.

One small company that competes with Verizon and SBC is Chicago-based Focal Communications Corp., which is closely watching the FCC initiative.

"The dominant carriers want to maintain their monopoly," said Richard Metztger, Focal's vice president of regulatory and public policy. "They'll push the FCC to give them as much as they can get to have unfettered power.

"But when push comes to shove, I don't think the commission will do it, and if they do, I don't think there's any legal way to make it hold up."